Friday, June 13, 2014

The Business Challenges Impacting Digital Transformation

Design Guru Mike Clark

In this fast changing world of transformation, digital transformation, the rules of business are being changed before our eyes due to the impact of mobile technologies, big data, social media, the Internet of Things, cloud computing, etc. The strategies of yesteryear are no longer delivering wins. Think banking, retailing, education, taxi services and social media. The world is transformed and we all need to be studying the emerging lessons of the winners. My colleagues at Cognizant's Center for the Future of Work, have just published a book on these new rules of business called Code Halos, it is available on Amazon and bookstores now.

My friend, business and technology design guru, Mike Clark, shares his perspective here on some of the key challenges companies face when attempting digital transformation.

Digital transformation is changing the face of business. Established household names are now battling new online and mobile start-ups, and in some cases competing against their customers. Products are no longer the key differentiator, rather it is the ecosystem. Organisations that recognize and act decisively on this will be in a position to win.

Organisations are not Designed for Adaptive Change

Most established organisations are not designed for an adaptive digital environment. Rigid processes and silo-based business functions make quick adaptive change based on the needs of the business a big challenge. The abilities which are required to make digital transformations possible are delayed, or in some cases undelivered due to the business' operating model which is not designed to deliver incremental integrated changes.

The Gap Between Risk vs. Reward Impacting Adoption

The move to a digital world makes the business case for new ideas difficult for management to quantify. Senior management in most cases are still trying to understand what digital means, which impacts not only decision-making, but also organisational adoption. Customers who have an attachment to a brand are provided with limited choice and are forced down the usual channels until management can develop a digital strategy.

The New World Battle with Legacy

When embarking on the digital journey organisations are, in most cases, faced with the challenges of legacy IT systems, which are heavily interconnected. Often systems are badly documented and the knowledge of their inner workings is no longer in the organisation. Architecture teams approach digital in the same way as any other system, which results in slow delivery with an inward focused approach. Customers who want a seamless digital experience encounter poor performance, and irrelevant disjointed information.

30% of 5.2 billion mobile users now use smartphones. Mobile accounts for 25% of all web usage. In short, if you’re still doing business and research only on the web (or offline), you’re missing out

How Digital Silos Get Built

Organisations apply old school management thinking, a new department is quickly created, which has its own processes, technology, and in some cases specific digital products. Very quickly a silo is created, and the organisation’s technology landscape becomes more complex. No one understands the digital department, and other functional areas start to work independently.

Digital Capabilities Do Not Serve the Customer

The digital capabilities tend to be designed around the constraints of the internal processes and technology. As a result customers are presented with products that can only be used across specific channels, which limits choice and leads to frustration.

***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and digital transformation analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.